Monday, December 22, 2008

From Techcrunch:"Business Week gets their hands on Digg’s financials and reports that the company had 2007 revenues of $4.8 million and losses of $2.8 million. The first three quarters of 2008 Digg had revenues of $6.4 million and losses of $4 million. That implies total 2008 revenue of $8.5 million, with $5.3 million in losses.

First of all, ouch. People close to Digg once suggested to me that the Microsoft search deal, which was announced in July 2007, would bring in well over $100 million in revenue to Digg over the three year agreement (something we’ve never reported). That suggestion seems to be completely false. The deal is bringing in less than $10 million/year.

Second, Digg shouldn’t be losing money. They have over 70 employees, the company recently confirmed, and plan to grow to 150 by the end of next year. That’s an awful lot of people for a company that outsources sales and content creation, and has little to do besides focus on keeping the servers humming.

Granted, Digg has a number of people on staff that moderate content and focus on the community. But even so, experts I polled this evening who’ve run large..."